Low Tuck Kwong v Sukamto Sia

Philip Pillai J:

[1] The plaintiff is the President Commissioner and controlling shareholder of PT Bayan Resources Tbk (“Bayan Resources”), a coal mining company listed on the Indonesian Stock Exchange (“IDX”). The defendant is a businessman. They were close friends until 1997, after which they became bitter enemies. Although the principal events surrounding this defamation and malicious falsehood action occurred in Indonesia, the plaintiff has brought this action in Singapore, where both of them are resident and the defendant has filed his counterclaim.

[2] In late 2007, Bayan Resources began preparing for its initial public offering (“IPO”) on the IDX. The IPO was structured to offer new shares and vendor shares, including some of the plaintiff’s shares. As the IPO was to be a global offering, PT Trimegah Securities Indonesia Tbk (“PT Trimegah”) was appointed as the domestic lead managing underwriter, Merrill Lynch (Singapore) Pte Ltd (“Merrill Lynch Singapore”), who was assisted by PT Merrill Lynch Indonesia, was appointed sole book runner and lead international selling agent, Macquarie Capital (Singapore) Pte Ltd (“Macquarie Singapore”) was appointed international selling agent and “Macquarie” was appointed the co-lead manager and international selling agent (see Bayan Resources’ Preliminary Offering Memorandum dated 4 July 2008) (collectively, the “IPO Advisors”).

[3] On 10 July 2008, the defendant’s Indonesian lawyers, M/s Hotman Paris & Partners (“HPP”), sent a letter to the plaintiff and Bayan Resources (the “1 Letter”). This letter was written in Bahasa Indonesia. The defendant’s English translation reads as follows (where there are material differences highlighted by the parties between their translations, the defendant’s translation is underlined and the plaintiff’s translation follows in square brackets and italics):

[4] On 14 July 2008, Bayan Resources’ Indonesian lawyers, M/s Soernardi Richard Sekutu (“SRS”), sent a letter to HPP (“SRS Letter”) asking for a copy of the Special Power of Attorney dated 9 July 2008 referred to in the 1 Letter and received no reply. Apart from the SRS Letter, HPP did not receive any response, either from the plaintiff or Bayan Resources, to the 1 Letter.

[5] On 15 July 2008, HPP sent a second letter to the plaintiff, Bayan Resources and SRS (the “2 Letter”) which was, save in one immaterial way, identical to the 1 Letter.

[6] On 21 July 2008, HPP sent a third letter to (a) the Chief of theIndonesian Capital Market and Financial Institutions Supervisory Agency (“BAPEPAM”), the Indonesian capital market regulator; (b) the Director in Chief of the IDX; (c) PT Trimegah; (d) Merrill Lynch at a Jakarta address; and (e) Macquarie Securities and Macquarie Consultants at an identical Jakarta address (the “3 Letter”). The 3 Letter enclosed the 1 Letter, the SRS Letter and the 2 Letter. The defendant’s English translation of the 3 Letter, which was written in Bahasa Indonesia, reads as follows (where there are material differences highlighted by the parties between their translations, the defendant’s translation is underlined and the plaintiff’s translation follows in square brackets and italics):

[7] On 24 July 2008, Bayan Resources informed BAPEPAM and IDX that the plaintiff would withdraw his shares from the IPO vendor shares sale, and that the other vendor shareholders of Bayan Resources would sell more shares to make up the shortfall resulting from his withdrawal. On 4 August 2008, BAPEPAM issued the Effective Statement which allowed the IPO to proceed. The IPO was launched on 12 August 2008, four days later than originally planned.

[8] On 3 October 2008, the plaintiff commenced this action against the defendant for defamation and malicious falsehood. The defendant counterclaimed in breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty and money had and received.

[9] As this action has been bifurcated, my decision deals solely with liability on the claims and counterclaims.

[10] The plaintiff’s case is that the 1 Letter, the 2 Letter and the 3 Letter (collectively, the “Letters”) are defamatory of the plaintiff and that they were published by the defendant to the following persons in Indonesia:

(a) in respect of the 1 Letter and the 2 Letter, to Bayan Resources.

(b) in respect of the 3 Letter, to the Head of BAPEPAM, the Managing Director of the IDX, PT Trimegah, PT Merrill Lynch Indonesia, PT Macquarie Securities Indonesia and PT Macquarie Konsultan Indonesia.

It is apposite to note here that an examination of the 3 Letter reveals that it was addressed not to PT Merrill Lynch Indonesia but to Merrill Lynch at a Jakarta address. Additionally, it was addressed not to PT Macquarie Securities Indonesia and PT Macquarie Konsultan Indonesia but to Macquarie Securities and Macquarie Consultants both at an identical Jakarta address.

[11] The plaintiff avers that the defendant’s publication of the Letters led to the following republications:

(a) In Indonesia:

(i) the 1st Letter and the 2 Letter to BAPEPAM;

(ii) the 3rd Letter to Bayan Resources; and

(iii) the Letters or their summarised content in two Indonesian newspapers and Bayan Resources’ Indonesian Final Prospectus.

(b) In Singapore:

(i) the Letters to Merrill Lynch Singapore; and

(ii) the Letters or their summarised content in Bayan Resources’ Pricing Supplement to the Preliminary Offering Memorandum and Bayan Resources’ International Final Offering Memorandum.

[12] The plaintiff further avers that as a result of the Indonesian Publications, Indonesian Republications and Singapore Republications:

(a) the plaintiff’s reputation was damaged and he suffered hurt, distress and embarrassment;

(b) the plaintiff was not able to sell 375,000,000 vendors shares in the IPO at the price of Indonesian Rupiah (“Rp”) 5,800 per share for a total sum of Rp 2.175 trillion; and

(c) the plaintiff lost the opportunity to use and invest Rp 2.175 trillion.

[13] The plaintiff is thus bringing this action against the defendant in defamation for the Indonesian Publications, Indonesian Republications and Singapore Republications. The plaintiff is also bringing this action against the defendant in malicious falsehood on the basis that the Letters are a malicious falsehood.

[14] The essence of the defendant’s case is that he had a common understanding with the plaintiff, to whom he had given S$3 million to “invest and facilitate” the plaintiff’s establishment of an Indonesian coal mining business, on the basis that if the business was established, the defendant would have a 50% share in the business and if not, the plaintiff would return the S$3 million (the “Common Understanding”). On the basis of the Common Understanding, the defendant denies that he defamed the plaintiff and that the Letters are a malicious falsehood, and he counterclaims in breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty and money had and received.

[15] I turn first to the plaintiff’s claim in defamation. The place of commission of the tort of defamation is the place in which the defamatory statement is published (see Dicey, Morris and Collins on The Conflict of Laws (Sweet & Maxwell, 14th Ed, 2006) at 35-141). Thus, the Indonesian Publications and Indonesian Republications would be alleged torts committed in Indonesia whilst the Singapore Republications would be alleged torts committed in Singapore.

[16] For the Singapore Republications, the plaintiff need only show that they are actionable under Singapore law. For the Indonesian Publications and Indonesian Republications, however, the double actionability rule requires the plaintiff to show that they are actionable under both Singapore law and Indonesian law (see Boys v Chaplin [1971] 1 AC 356 and JIO Minerals FZC and others v Mineral Enterprises Ltd [2011] 1 SLR 391 at [88]).

[17] If the plaintiff proves that the publications and republications are so actionable, the defendant must, in order to avoid liability, prove that he has a defence. For the Singapore Republications, the defendant must prove that he has a defence under Singapore law. However, for the Indonesian Publications and Indonesian Republications, it is sufficient for the defendant to prove that he has a defence under either Singapore law or Indonesian law (See Cheshire and North’s Private International Law (11th ed, Butterworths 1987) at [532] cited with approval in Low Tuck Kwong v Sukamto Sia [2009] SGHC 147 at [14]).

[18] Under Singapore law, a statement is defamatory in nature if it tends to:

(a) lower the plaintiff in the estimation of right-thinking members of society generally;

(b) cause the plaintiff to be shunned or avoided; or

(c) expose the plaintiff to hatred, contempt or ridicule. (see Gary Chan Kok Yew & Lee Pey Woan, The Law of Torts in Singapore (Academy Publishing, 2011) (“The Law of Torts in Singapore”) at 12.014).

[19] The principles applicable to the construction of words based on their natural and ordinary meanings were summarised by the Court of Appeal in Chan Cheng Wah Bernard and others v Koh Sin Chong Freddie and another appeal [2012] 1 SLR 506 (“Chan Cheng Wah Bernard”) at [18]:

[20] In this case, all three Indonesian Publications carried substantially the same content and meaning. I find their natural and ordinary meaning to be that (i) the plaintiff had persuaded the defendant to “invest and facilitate” the establishment of a coal mining business in Indonesia in return for 50% of the shares in the resulting coal mining company if it was established; (ii) the defendant did fund and facilitate the establishment of the coal mining company, which included the acquisition of coal mining concession rights, and the company was then established under the name of Bayan Resources; and (iii) the plaintiff never gave the defendant 50% of the shares in Bayan Resources and there was a legal dispute between them relating to these shares.

[21] In the 1 Letter and the 2 Letter, the defendant demanded that the plaintiff surrender and return at least 50% of the total shares in Bayan Resources and its group, failing which he would proceed with civil and criminal suits against the plaintiff and Bayan Resources. The 3 Letter, addressed to BAPEPAM, IDX and the IPO Advisors, asked that the IPO be suspended because of this legal dispute between the defendant and the plaintiff “so as not to cause any losses to a third party and to avoid any lawsuits by [the defendant].”

[22] The plaintiff submits that the Indonesian Publications are defamatory in nature as their natural and ordinary meaning is that the plaintiff, having induced the defendant to invest in a coal mining business, now known as Bayan Resources, in return for 50% of the shares of that business, has on his part reneged on the bargain. The plaintiff further submits that the Indonesian Publications mean that the plaintiff was “seeking to mislead the public in relation to his shareholding in Bayan Resources” and that he has “therefore acted dishonourably and has committed a crime.”

[23] I find that to an ordinary reasonable person using his general knowledge and common sense, and in the context of an imminent IPO involving the shares of Bayan Resources which was reported to be the President Commissioner and controlling shareholder, the meaning of the Indonesian Publications would be that the defendant and the plaintiff had some private arrangement or understanding to account for and deliver 50% of Bayan Resources shares, which the plaintiff had not performed. This meaning is defamatory in nature and in the context of such an IPO, in that it would tend to lower the plaintiff in the estimation of right-thinking members of society generally or impute a lack of integrity. Thus, the Indonesian Publications are to this extent actionable under Singapore law.

[24] I am unable to accept the plaintiff’s extended meaning to the Indonesian Publications that the plaintiff was seeking to mislead the public in relation to his shareholding. First there is no language in the Letters suggesting this. Second, the 1 Letter and 2 Letter are notices/”warnings” of the defendant’s claim as a prelude to his initiating civil and criminal proceedings. The 3 Letter clearly expresses that the defendant’s claim was a “legal dispute” that he had with the plaintiff.

[25] The plaintiff’s Indonesian law expert, Dr Frans Hendra Winarta (“Dr Winarta”), is of the opinion that under Indonesian law, a person who has been defamed/”affronted” can bring a claim in the following ways:

(a) Claim for “defamation” or “libel” under article 1372 of the Indonesian Civil Code (“ICC”) read with article 310 of the Indonesian Penal Code (“IPC”) and article 1365 of the ICC; or

(b) Claim for an “unlawful act” under article 1365 of the ICC.

[26] The defendant’s Indonesian law expert, Dr Otto Hasibuan (“Dr Hasibuan”), is of the opinion that a claim for defamation/”affront” under Indonesian law can only be brought under article 1372 of the ICC read with article 310 of the IPC. It cannot be brought under article 1365 of the ICC, whether alone or read with article 1372 of the ICC.

[27] The parties and experts agreed on the following English language translations of the relevant provisions of the ICC and the IPC:

(a) Article 1365 of the ICC:

(b) Article 1372 of the ICC:

(c) Article 310 of the IPC:

[28] Dr Winarta and Dr Hasibuan agree that the definition of the term “affront” in article 1372 of the ICC is found in article 310(1) of the IPC. The elements of “affront” are as follows:

(a) there must be an intentional or wilful attack on someone’s honour or good name;

(b) an accusation must be made of certain matters; and

(c) there must exist a purpose to make the defamatory attacks known to the public.

[29] Even if I accept the defendant’s argument that he made the Indonesian Publications with the predominant intention of protecting his interests and/or the public interest, I accept Dr Winarta’s opinion that element (a) does not speak of the predominant or sole intent of the defamatory attack, it only requires that the defendant intended that there be such an attack, ie, he did not make the attack negligently or innocently. In this case, I find that the Indonesian Publications were intentional attacks on the plaintiff’s “honour or good name”. As for the remaining elements, I find that the Indonesian Publications contained accusations against the plaintiff and that there was an intention to make the Indonesian Publications known to the public, where “public” means one or more third parties other than the plaintiff (see J. Satrio, Civil Lawsuit on the Basis of Affront as an Unlawful Act (plaintiff’s translation of the title) (“Satrio’s Opinion”) at 31-32). Thus, I find on a balance of probabilities that the Indonesian Publications are actionable under Indonesian law, and specifically under article 1372 of the ICC read with article 310 of the IPC.

[30] I turn next to consider Dr Winarta’s opinion that the plaintiff may alternatively elect to bring a claim under article 1365 of the ICC. Dr Hasibuan disagrees on the ground that “article 1365 is general (lex generalis), while article 1372 is specific (lex specialis)”, and it is not permissible to frame a claim under a general provision when there is a clear specific provision for that purpose. To support his position, Dr Hasibuan refers to the Indonesian Supreme Court decision of Time Inc Asia et al v H.M. Soeharto (No 273 PK/PDT/2008) (“Time Inc Asia”) where the court stated the following (at 87):

[31] Given that this action is brought in Singapore on alleged torts committed in Indonesia, this common law precedent based court has to make findings of fact as to the law of Indonesia, a non-precedent based civil law jurisdiction, with the assistance of the Indonesian law experts. I would accordingly adopt a cautious approach and place much weight on the decision in Time Inc Asia, which is the only decision produced before this court which addresses the question of whether a defamation/”affront” claim may be brought under article 1365 of the ICC in light of article 1372 of the ICC which deals specifically with defamation/”affront”. The Indonesian Supreme Court in Time Inc Asia unequivocally ruled that in a defamation/”affront” action, the judge is not allowed to use the criteria of article 1365 of the ICC but only the special provision of article 1372 of the ICC. The plaintiff concedes that Time Inc Asia decided that a claim for defamation/”affront” should be brought under article 1372 of the ICC and not under or by reference to article 1365 of the ICC. I note Dr Winarta’s citation of Lauw Juanda Lesmana v Hasim Sutiono Suryopratomo (No 1331K/PDT/2004) where the Indonesian Supreme Court upheld a lower court decision on an “affront” claim under article 1365 of the ICC read with article 1372 of the ICC and Denden Sudarman v Yusuf Suparma (No 396K/PET/2001) where the Indonesian Supreme Court upheld a lower court decision on a defamation claim under article 1365 of the ICC. However, in neither of these cases was the question posed and addressed head on as it was in the Time Inc Asia case. In light of this, I make a finding of fact that a claim in defamation/”affront” under current Indonesian law can only be brought under article 1372 of the ICC.

[32] This is not to say that Dr Winarta’s opinion that a person who has been “affronted” may alternatively bring an action under article 1365 of the ICC may not in the future find favour with the Indonesian courts, as the Indonesian courts are not bound by the doctrine of precedent. However in the absence of Indonesian Supreme Court or superior court decisions produced before me in which this question was raised and addressed head on in support of his opinion, I am unable to make a finding of fact that this is the current position under Indonesian law.

[33] On 18 July 2008, the plaintiff sent a letter to BAPEPAM enclosing the 1 Letter, and Bayan Resources sent a letter to BAPEPAM enclosing the 1 Letter and the 2 Letter. Both republications had a cover letter in which Bayan Resources and the plaintiff denied the defendant’s allegations. Bayan Resources’ letter to BAPEPAM stated the following:

In the plaintiff’s letter to BAPEPAM, the plaintiff stated:

[34] On 21 July 2008, Merrill Lynch Singapore sent an email to Bayan Resources attaching the 3 Letter.

[35] The following passage was published: (i) on 5 August 2008 in the Suara Pembaruan newspaper at page 23; (ii) on 6 August 2008 in the Bisnis Indonesia newspaper at page F3; and (iii) in Bayan Resources’ Indonesian Final Prospectus dated 6 August 2008 at page xx (English translation provided by the plaintiff):

[36] The Indonesian Final Prospectus additionally stated the following (at page 102) (English translation provided by the plaintiff):

[37] I begin by determining whether the Indonesian Republications are defamatory in nature. The defendant’s argument that the summaries of the Indonesian Publications in the Indonesian Republications bear a lesser (if any) defamatory meaning than the Indonesian Publications themselves because the summaries merely convey the fact that the defendant has made a claim must fail because of what was termed the “repetition rule” in Stern v Piper [1997] QB 123 (at 135):

[38] In determining the natural and ordinary meaning of the Indonesian Republications, regard must be had to the republications as a whole (See Chan Cheng Wah Bernard at [18(e)] (at [18] above). Unlike the Indonesian Publications, most of the Indonesian Republications contained the plaintiff’s denial of and response to the defendant’s claim which may be regarded as “the antidote” to “the bane” (see Lim Eng Hock Peter v Lin Jian Wei and another [2009] 2 SLR(R) 1004 at [92]). In this regard, I refer to the three levels of meaning set out in Chase v News Group Newspapers Ltd [2003] EMLR 218 (“Chase”), where the Court held that:

I find that the Indonesian Republications, save for the republication of the 3 Letter by Merrill Lynch Singapore to Bayan Resources, carry only the third defamatory meaning referred to in the passage from Chase cited above, viz, there are grounds for investigating if the plaintiff had an agreement or understanding with the defendant which he had not performed, as alleged by the defendant and denied by the plaintiff. This finding will impact the quantum of damages payable by the defendant should liability be established. The republication of the 3 Letter by Merrill Lynch Singapore to Bayan Resources, which contained the full text of the 3 Letter and nothing more, carries the same defamatory meaning as the 3 Letter.

[39] In my view, the defendant is responsible for the Indonesian Republications as they are the natural and probable result of the Indonesian Publications (see Goh Chok Tong v Jeyaretnam Joshua Benjamin [1997] 3 SLR(R) 46 at [127]). The Indonesian Republications necessarily arose by reason of the disclosure requirements for public offerings of securities under articles 70, 78, 80 and 81 of the Law of the Republic of Indonesia Number 8 Year 1995 Concerning the Capital Market (“Indonesian Capital Market Law”) and other capital market requirements under Indonesian law. These extend to making such disclosures in the news media. This is supported by the opinions of Dr Winarta and the defendant’s Indonesian capital market law expert, Professor Dr Nindyo Pramono (“Professor Pramono”). Thus, the Indonesian Republications are actionable under Singapore law.

[40] Dr Winarta opined that according to the adequate veroorzaking theory of causation under Indonesian law, a defendant who makes a defamatory statement which is republished is liable for the damage caused by the republications if such republications “reasonably can be expected to arise” from his original defamatory statement. Dr Hasibuan agreed that the adequate veroorzaking theory is one of three theories of causation that could be used in Indonesia.

[41] Both Dr Winarta and Professor Pramono gave evidence that the Indonesian Republications can reasonably be expected to arise from the defendant’s Indonesian Publications owing to the disclosure requirements under Indonesia’s capital market laws (see [39] above). As such, I find on a balance of probabilities that the Indonesian Republications would be actionable under Indonesian law.

[42] The plaintiff pleaded that the Letters were republished to Merrill Lynch Singapore in Singapore. There is evidence that the plaintiff personally handed the 1 Letter to Merrill Lynch Singapore in Singapore. However, as the plaintiff concedes that he does not have evidence that the 2 Letter was received by the IPO team, including Merrill Lynch Singapore, in Singapore, and I find that there is also no evidence that the 3 Letter was republished to Merrill Lynch Singapore in Singapore, the republication of the 2 Letter and the 3 Letter to Merrill Lynch Singapore will not be considered for the purposes of liability in this Suit.

[43] The following passage was published in the following documents: (i) at page 3 of Bayan Resources’ Pricing Supplement to the International Preliminary Offering Memorandum dated 24 July 2008 (the “Pricing Supplement”), hard copies and soft copies of which were sent to potential investors in Singapore; and (ii) at page 5 of Bayan Resources’ International Final Offering Memorandum dated 24 July 2008 (the “International Final Offering Memorandum”), which was distributed to potential investors in Singapore:

[44] Applying the principles of Singapore law set out above (at [37]-[39]), I find that the Singapore Republications are actionable under Singapore law. The republication of the 1 Letter by the plaintiff to Merrill Lynch Singapore, which contained the full text of the 1 Letter and nothing more, carries the same defamatory meaning as the 1 Letter. I find that the remaining Singapore Republications carry the third defamatory meaning referred to in the passage from Chase cited above at [38], ie, they tell an ordinary reasonable reader that there are grounds for investigating if the defendant’s claims are true. The defendant is responsible for the Singapore Republications, which were a natural and probable consequence of the Indonesian Publications because the IPO was a global offering.

Whether there is a defence under Singapore law for the Indonesian Publications, Indonesian Republications and Singapore Republications

[45] The defendant relies on the following defences under Singapore law: justification, absolute privilege and qualified privilege. I will examine each in turn.

[46] In Arul Chandran v Chew Chin Aik Victor [2001] 1 SLR(R) 86 (“Arul Chandran”), the Court of Appeal explained (at [28]) that the defence of justification requires the defendant to prove the truth of the defamatory statements:

[47] The rationale for the defence of justification is set out in The Law of Torts in Singapore at [13.004] as follows:

[48] I have found the natural and ordinary meaning of the Indonesian Publications to be that set out above at [20]. The defendant’s defence is that the content of the Indonesian Publications is true because of the Common Understanding between him and the plaintiff.

[49] As such, I now set out the evidence in this court on the Common Understanding. The defendant’s evidence is that in late 1995, the plaintiff, who was then in financial difficulty, asked the defendant for S$3 million to “invest and facilitate” the plaintiff’s establishment of an Indonesian coal mining business. The plaintiff promised the defendant in return, a 50% share in the coal mining business if it was established, and if it was not, that he would repay the S$3 million. The defendant then gave S$3 million cash to the plaintiff, who issued him a cheque dated 25 April 1996 for S$3 million (the “Cheque”) as an assurance that the defendant would get his money back if the coal mining business was not established. It was also the defendant’s evidence that he had, over the years of his close friendship with the plaintiff, made other large cash and undocumented loans to the plaintiff, although this S$3 million was the biggest amount “in one shot”.

[50] The plaintiff denies that he had received S$3 million from the defendant and denies that there was any Common Understanding. To refute the defendant’s claim that he needed S$3 million in 1995, the plaintiff produced some evidence of his assets at that time. The defendant points out that this evidence was not supported by any valuation nor was there any evidence produced of the plaintiff’s liabilities at that time. The plaintiff confirmed under cross-examination that in early 1996, he had “some problems with [his] cash flows” and was considering selling part of his art collection. The plaintiff also admitted that his two active Singapore bank accounts were overdrawn for every month between mid-1995 to mid-1996. The plaintiff’s explanation for the Cheque is that he issued it on 25 April 1996 (and not in late 1995) at the request of the defendant, who wanted to use it to raise funds from others in order to procure payment by the defendant’s company (“Dynasty”) which had not paid the plaintiff and six others vendors for shares for listed shares purchased by and delivered to Dynasty. This debt led to the Hong Kong court proceedings by the plaintiff and other vendors against Dynasty which led to the appointment of provisional liquidators of Dynasty. The provisional liquidators obtained a Hong Kong worldwide Mareva injunction against the defendant which was later discharged. The plaintiff gave evidence that he had told the defendant not to cash the Cheque as there were insufficient funds in his account. The defendant challenges the plaintiff’s explanation in light of the plaintiff’s evidence that Dynasty then owed the vendors about S$41 million, a much larger sum than S$3 million.

[51] The defendant draws support for the Common Understanding from the chronology of events in late 1995 (which he says were unknown to him until after he received Bayan Resources’ draft prospectus in July 2008). This chronology reveals that the plaintiff incorporated a Singapore company, International Coal Pte Ltd (“ICP”) on 4 October 1995. Under cross-examination, the plaintiff stated that the Indonesian government had granted a coal mining concession to an Indonesian company called PT Gunung Bayan Pratama Coal (“GBPC”), and that GBPC had sold 65% of its concession rights to a Hong Kong company, Kristle Trading Limited (“Kristle”). On 1 November 1995, Kristle sold these concession rights to ICP. The plaintiff gave evidence that he later discovered that the transfer of concession rights was not recognised under Indonesian law. As such, in November 1997, the plaintiff having become an Indonesian citizen together with his partners acquired GBPC itself and thereafter used GBPC to produce coal. On 7 October 2004, Bayan Resources was incorporated in Indonesia and it subsequently acquired a controlling interest in GBPC. When Bayan Resources was listed on the IDX on 12 August 2008, GBPC was one of many of its subsidiaries. The plaintiff argues that information about the history of his involvement in the coal mining business is publicly available and that the defendant has hitched this publicly available chronology of events to corroborate his alleged Common Understanding.

[52] The evidence in court of the Common Understanding turns entirely on the plaintiff’s and the defendant’s respective word, there being, apart from the Cheque, no other witnesses or documentary evidence. This is a case of one party’s evidence and recollection of events in 1995 pitted against the other party’s contrary evidence and recollection of the same events relating to whether there was and if so what was the Common Understanding. Throughout the trial, each party repeatedly and extensively challenged the other’s veracity and credibility. This was further done by referring this court to sworn statements which they had each filed in earlier Hong Kong and Singapore court proceedings between them or involving them. These earlier sworn statements reveal that each of them had given evidence or explanations before these courts which are diametrically contradictory to the evidence, explanations and accounts which they each now give in this court. The only objective documentary evidence produced in this court was the Cheque. Apart from the fact that it is for $3 million, when it was issued and why remains obscure in the light of the time lapse and that the parties had many personal and financial transactions between them before they fell out.

[53] In the light of the above, I am unable to find, on the evidence adduced in this court, one way or another that there was or there was no Common Understanding or the terms of such Common Understanding. As such, I find that the defendant has not discharged his burden to prove the truth of the Indonesian Publications and therefore of the Indonesian Republications and Singapore Republications, and the defence of justification accordingly has not been made out.

[54] I next turn to the defence of absolute privilege. The rationale for this defence is explained in The Law of Torts in Singapore in the following manner (at [13.040]):

[55] In Lincoln v Daniels [1962] 1 QB 237, Devlin L.J. explained that absolute privilege which covers proceedings in or before a court of justice can be divided into the following three categories (at 257-258):

This means that absolute privilege covers everything that is done before a judge (for example, during a trial), everything that is done in the course of court proceedings from its commencement (when the writ or an equivalent document is issued) to its conclusion (when a decision is rendered or a determination made), and things done before the commencement of court proceedings which are considered to be “a step towards” the conduct of proceedings (Watson v M’Ewan [1905] AC 480 at 487).

[56] The defendant submits that the Indonesian Publications are protected by absolute privilege on the grounds that:

(a) the 3 Letter, insofar as it was sent to BAPEPAM, falls within Devlin L.J.’s second category as it was “the first step in a regulatory process of a quasi-judicial nature”; and

(b) all the Letters fall within Devlin L.J.’s third category as they were necessary to the commencement of proposed legal proceedings by the defendant against the plaintiff to enforce the Common Understanding.

[57] In respect of the first ground, I accept that absolute privilege may in limited occasions be extended beyond court proceedings to proceedings before tribunals which act in a manner similar to courts of law (see D v Kong Sim Guan [2003] 3 SLR(R) 146 at [99]). In Trapp v Mackie [1979] 1 WLR 377 at 379, Lord Diplock set out the following factors to determine if sufficient similarity exists for absolute privilege to apply (at 379):

(a) the authority under which the tribunal acts;

(b) the nature of the question into which it has a duty to inquire;

(c) the procedure adopted by it in carrying out the inquiry; and

(d) the legal consequences of the conclusion reached by the tribunal as a result of the inquiry.

[58] I note the case of Mahon v Rahn (No. 2) [2000] 1 WLR 2150 in which the English Court of Appeal extended absolute privilege to a bank’s response to queries from a securities regulator. I further note Buckley v Dalziel [2007] 1 WLR 2933 in which the English Court extended absolute privilege to a complaint made to the police.

[59] Article 4 of the Indonesian Capital Market Law provides that BAPEPAM shall develop and regulate capital market activities so as to create an orderly and efficient capital market and to protect the interests of investors and the public. Article 5 of the same law provides that BAPEPAM may conduct or procure inspections into suspected violations of the Indonesian Capital Market Law and suspend or cancel listings or stock exchange transactions. Both Dr Winarta and Professor Pamono agree that BAPEPAM is not a court of law and is not in a position to determine who is right or wrong on the matter at hand. They also agree that BAPEPAM only has an “interest as to whether the registration statement submitted by the companies which are going public contain the material information or not.” It is unclear from the expert evidence that the 3 Letter to BAPEPAM whether BAPEPAM would have precipitated BAPEPAM to conduct a formal inquiry following the dispute described in this Letter and what legal consequences would follow in this pre-IPO context.

[60] In any event, it is significant to note what occurred on this occasion. The 3 Letter to BAPEPAM was not a complaint for BAPEPAM to conduct an investigation. It was expressly for the purpose of requesting BAPEPAM to suspend the planned IPO because of the legal dispute between the defendant and the plaintiff relating to the Bayan Resources shares. The result of the 3 Letter, according to the plaintiff, was that the IPO Advisors met with BAPEPAM and were told that they “would have to clear any disputes on the shares before the IPO could proceed”. According to the plaintiff, the matter was resolved when upon the advice of the IPO Advisors the plaintiff decided and informed BAPEPAM that he would withdraw his planned vendor shares offer which would be replaced by vendor shares offered by theother shareholders to make up the shortfall. In these circumstances and without greater clarity on Indonesian capital market law and practice, I am unable to conclude that absolute privilege would extend to the 3 Letter to BAPEPAM.

[61] In respect of the second ground that all the Letters were necessary, under Indonesian law, before court proceedings could be commenced, the Indonesian law experts have different opinions as to whether the defendant had a legal obligation under articles 1238 and 1243 of the ICC to send a warning letter to the plaintiff before he commenced legal proceedings against the plaintiff. In any event, as Dr Winarta pointed out, the defendant was not required by Indonesian law to send the 1 Letter and the 2 Letter to Bayan Resources, who was not an alleged contractual counterparty to the defendant. The defendant has also not shown that he had a legal obligation to send the 3 Letter to BAPEPAM, IDX and the IPO Advisors prior to commencing a court action against the plaintiff and Bayan Resources in Indonesia. Thus, it has not been established before this court that the requisite Singapore law elements for absolute privilege have been made out.

[62] In respect of the defence of qualified privilege, the defendant argues that the Indonesian Publications, Indonesian Republications and Singapore Republications were published on privileged occasions because the “duty-interest” test is satisfied. This test was explained by Lord Atkinson in Adam v Ward [1917] A.C. 309 at 334:

In Mallan v A M Bickford & Sons, Limited [1915] SALR 47), the court held that (at 84):

[63] The rationale for the defence of qualified privilege was stated by Lord Diplock in Horrocks v Lowe [1975] AC 135 (“Horrocks”) (at 149) to be as follows:

[64] I turn now to the question of whether the defendant had an interest to make the Indonesian Publications. The scope of the “interest” that is required to establish the defence of qualified privilege is explained in Gatley on Libel and Slander (Sweet & Maxwell, 11th ed, 2008) (“Gatley”) as follows (at 14.12):

In Blackham v Pugh (1846) 15 L.J.C.P. 290, which is cited by Gatley immediately after the above passage, Tindal CJ recognised and applied (at 620) (see also Coltman J at 621, Cresswell J at 623-624 and Erle J at 625-626):

[65] In the present case, while the defendant has not been able to prove that his claims in the Indonesian Publications are true, it remains to be determined whether he believed them to be true and without any malicious motive in order to be excused from responsibility for the defamation.

[66] In my view, the defendant’s actions in instructing his Singapore and Indonesian lawyers and acting on the latter’s advice to make the Indonesian Publications show that he believed that he had a claim against the plaintiff and that his claims in the Indonesian Publications were true. The defendant issued his Indonesian lawyers a power of attorney which authorised them to take a broad range of legal steps to pursue his claim. Further, it is in evidence that on 29 June 2008, the defendant’s friend and an investment banker at Merrill Lynch Singapore, Mr Christopher Clower, mentioned to the defendant that he was working on an IPO of an Indonesian coal mining company. The defendant later overheard Mr Clower mentioning a “Dato Low” in a private telephone call. This would be consistent with the defendant’s account of what precipitated his actions that followed. It is his evidence that he then made further independent enquiries and obtained a copy of Bayan Resources’ draft prospectus dated 2 July 2008. Following this, he instructed his Indonesian lawyers to make the Indonesian Publications. These actions and timelines corroborate that he believed that he had a claim against the plaintiff. The defendant’s conduct and demeanour under cross examination in this court further reflected his continued belief. That being my finding, the Indonesian Publications were made in order to protect what the defendant believed to be his business interests.

[67] With respect to the recipients of the Indonesian Publications which contained information about the defendant’s claim, I find that Bayan Resources had an interest in receiving the 1 Letter and the 2 Letter. Bayan Resources had a duty to disclose all the material facts in the global IPO and listing documents. The defendant’s claim for 50% of Bayan Resources’ shares is material and disclosable in the context of the global IPO in two critical respects: first with respect to the identities of the controlling shareholders of Bayan Resources and second the fact of the claim itself. The IPO Advisors had an interest in receiving the 3 Letter as they would share responsibility for the accuracy and completeness of the global IPO documents. I find Macquarie Securities and Macquarie Consultants (both occupying the same Jakarta address) to be part of “Macquarie” which is described only by its logo in Bayan Resources’ Preliminary Offering Memorandum dated 4 July 2008 as the co-lead manager and international selling agent in the global IPO. IDX had an interest to receive the 3 Letter as it is the stock exchange on which Bayan Resources was to be listed and traded. Finally, BAPEPAM had an interest to receive the 3 Letter as it is the principal capital market regulator which will decide whether to issue the Effective Statement for the IPO. For the above reasons, the defence of qualified privilege extends to the Indonesian Publications.

[68] The defence of qualified privilege will be defeated if the plaintiff can show that there was malice on the part of the defendant. In this case, the plaintiff argues that malice is made out because (i) the defendant had a “deep-seated hatred” for the plaintiff after the plaintiff commenced legal actions against him and Dynasty in Hong Kong, resulting in a worldwide Mareva injunction being ordered against him; (ii) the defendant wanted to exact revenge by stopping the IPO or preventing the plaintiff from selling his shares in the IPO, outcomes which could not have been of any legitimate consequence to him; and (iii) the defendant made the Indonesian Publications despite knowing that they contained false claims.

[69] It is clear from the authorities that in order to defeat the defence of qualified privilege, it is not enough to show that the defendant disliked the plaintiff and knew that the defamatory statement would injure the plaintiff. In this regard, I refer to observations Lord Diplock’s observations in Horrocks, where he held (at 149):

Lord Diplock continued (at 150-151) to hold:

[70] I have found that the defendant believed his claim was true at [66] above. I am unable to accept that stopping Bayan Resources’ IPO and preventing the plaintiff from selling his shares in the IPO are outcomes which could not have been of any legitimate consequence to the defendant. Since his claim is for 50% of Bayan Resources’ shares, he had every reason to want to preserve the status quo until his claims were resolved by agreement or by the courts. The text of the 3 Letter was a request to BAPEPAM to suspend the IPO because of the legal dispute between the defendant and the plaintiff relating to the Bayan Resources shares. Further, while the defendant has not been able to adduce evidence in this court to prove the Common Understanding, this alone cannot warrant any adverse inference that he knew that the Indonesian Publications contained false claims. That the claims in the Indonesian Publications were false have to be independently provided in this court and they have not been proven. For the above reasons, I find that the plaintiff has been unable to prove malice that would defeat the defence of qualified privilege.

[71] Finally, I turn to the question of whether the defendant can raise the defence of qualified privilege in respect of the Indonesian Republications and Singapore Republications. The defendant argues that it can and relies on the following passage in Gatley at (para 6.43):

[72] It is the plaintiff’s own case that the plaintiff, Bayan Resources and the IPO Advisors had a legal duty to disclose the defendant’s claim to BAPEPAM and to the investing public through the IPO documents as well as the news media. I would add that this is because BAPEPAM and the potential IPO share purchasers each had an interest to receive information about the claim. In terms of the republications between the plaintiff, Bayan Resources and the IPO Advisors, the duty-interest test is similarly satisfied: the republisher had an interest to make the republication and the recipient to whom the republication was made had an interest to receive it. For these reasons, I find the Indonesian Republications and Singapore Republications each to have been made on occasions of qualified privilege. The defence of qualified privilege therefore applies to the Indonesian Publications, Indonesian Republications and Singapore Republications.

[73] The defendant relies on the public interest defence and the necessary defence set out in article 1376 of the ICC. The agreed translation of this provision states as follows:

[74] On the public interest defence, Dr Winarta refers to the following passage from Satrio’s Opinion at 91 (English translation provided by the plaintiff):

[75] During the trial, Dr Winarta and Dr Hasibuan agreed that where the statement in question was made for both the defendant’s personal interest and the public interest, the public interest element must have been greater than the private interest element in order for the defence to succeed. They also agreed that for the defence to succeed, the statement must be true. Since the defendant has not been able to prove in this court that the content of the Indonesian Publications, Indonesian Republications and Singapore Republications are true (see above at [52]), the public interest defence under Indonesian law appears to be unavailable.

[76] For the necessary defence to be established, Dr Winarta is of the opinion that the statement in question must be (i) true; (ii) said in good faith; (iii) in proportion to the circumstances; and (iv) made in court proceedings. Although Dr Hasibuan opines that the necessary defence applies in this case, he gave evidence during trial that in his thirty years of experience, he did not know of any textbook or Supreme Court decision which says that the necessary defence applies outside of court proceedings. Since the Indonesian Publications, Indonesian Republications and Singapore Republications were made outside of court proceedings, and also because the defendant has been unable to prove the truth of the content of the Indonesian Publications, Indonesian Republications and Singapore Republications (see above at [52]), the necessary defence appears to be unavailable.

[77] Although I have found that the defence of qualified privilege has been made out in respect of the Indonesian Publications, Indonesian Republications and Singapore Republications, I will, for completeness, examine whether the reliefs claimed by the plaintiff are available under Singapore law and Indonesian law. The plaintiff is claiming the following reliefs:

(a) general damages, including damages for loss of opportunity and aggravated damages;

(b) special damages (with interest and damages for currency exchange loss); and

(c) an injunction to restrain the defendant, whether by himself, his servants, agents or otherwise howsoever, from publishing or causing to be published the same or similar words defamatory of the plaintiff in any manner whatsoever.

[78] The plaintiff must prove that the types of reliefs that he is seeking for the Indonesian Publications and Indonesian Republications are available under both Indonesian law and Singapore law. The plaintiff must also prove that the reliefs that he is seeking to claim for the Singapore Republications are available under Singapore law.

[79] Under Singapore law, a person who has been defamed can claim general damages as compensation for the effects of the defamation. In Arul Chandran, the Court of Appeal explained that (at [53]):

In McCarey v Associated Newspapers Ltd (No. 2) [1965] 2 Q.B. 86 at para 104, the Court held that “compensatory damages may include not only pecuniary loss and anticipated pecuniary loss or any social disadvantages which result, or may be thought likely to result, from the wrong which has been done”. It was noted in Gatley at para 9.2 that while actual financial loss which is not too remote is recoverable, it is “a comparatively rare case in which evidence of such loss is given, simply because it is not available”. Accordingly, a plaintiff in a defamation action may recover general damages for financial loss that he is able to prove flowed from the defamation.

[80] Under Singapore law, aggravated damages are a component of general compensatory damages (see Goh Chok Tong v Jeyaretnam Joshua Benjamin [1998] 2 SLR(R) 971 at [51]) and are available as a remedy for defamation. The factors that the courts consider in determining damages, including whether aggravated damages are justified, are as follows (see Halsbury’s Laws of Singapore (volume 18) (LexisNexis, 2012 Reissue) (“Halsbury’s Laws of Singapore”) at [240.194]):

In this case, even if liability for defamation were to have been made out, I find that no aggravated damages would be warranted. The Indonesian Publications were made to a limited audience of Bayan Resources, the necessary regulators and the IPO Advisors, and the republications were necessitated by applicable disclosure laws. Given that there remained a dispute between the parties relating to the Common Understanding, no natural indignation of the court at the injury caused to the plaintiff arises. Finally the conduct of the defendant from the time of the Indonesian Publications to this action is consistent with his belief that he has a claim though he has not been able to prove this claim on the basis of evidence adduced in this court. Whilst the parties are currently bitter enemies, the plaintiff has not proved that the defendant made the Indonesian Publications with malice devoid of any interest or that they contained false claims.

[81] Special damages may also be awarded in an action for defamation. Thus, Halsbury’s Laws of Singapore states (at [240.205]):

The defendant does not dispute that special damages are available under Singapore law. He argues, however, that he did not cause the loss for which the plaintiff claims special damages. This is an issue for the assessment of damages stage of the proceedings.

[82] Finally, under Singapore law, a court which has found a defendant liable for defamation has jurisdiction to grant an injunction restraining “any repetition of the slander or of similar imputations” (Lee Kuan Yew v Jeyaretnam Joshua Benjamin [1990] 1 SLR(R) 709 at [61]; Arul Chandran v Chew Chin Aik Victor JP (Suit No 1896 of 1998) at [331]). The court will grant such an injunction if it is satisfied that the words are injurious to the plaintiff and there is reason to apprehend further publication by the defendant (Gatley at [9.28]). The defendant does not dispute that an injunction is a relief that the plaintiff may claim under Singapore law. In this case, I see no grounds for the issue of an injunction as there is no evidence before me as would give rise to an apprehension of further publication of the claims in the Indonesian Publications by the defendant.

[84] Dr Hasibuan’s disagrees, and opines that a plaintiff in an article 1372 of the ICC action may make the following claims:

(a) a claim for material loss due to the damage to his reputation and honour;

(b) a claim for his honour and reputation to be restored; and

(c) a claim for it to be mentioned in the judge’s decision that the action complained of is an insult.

Dr Hasibuan explains that the reason for the limitation in limb (a) above is because of the second sentence in article 1372 of the ICC which directs the judge to “consider the gravity of the affront, the rank, the position and the capacity of both parties and the circumstances”.

[85] As I have made a finding of fact that under current Indonesian law, a claim in defamation/”affront” can only be brought under article 1372 of the ICC (see above at [31]), the plaintiff can only claim, in respect of the Indonesian Publications and Indonesian Republications, the remedies available in an article 1372 action. I am unable to conclude that the remedies available in an article 1372 action extend to those available under article 1365 of the ICC and articles 1243-1352 of the ICC, as proposed by Dr Winarta. I accept Dr Hasibuan’s opinion that in an article 1372 action, damages are claimable for material loss only to the extent that such loss is due to the damage to the plaintiff’s reputation and honour.

[86] I accept Dr Winarta’s opinion that a judge hearing an article 1372 of the ICC action may take into account the relevant circumstances set out in article 1372, including the aggravating and mitigating circumstances. Thus, what is termed “aggravated damages” under Singapore law is available under Indonesian law in an article 1372 action. Dr Winarta further opines that under Indonesian law, the Indonesian courts can grant an injunction to compel a defendant to do an act. The defendant does not dispute this. I therefore accept that an injunction is an available remedy under Indonesian law.

[87] In summary, damages for loss of opportunity may be recoverable under Singapore law and under Indonesian law but only to the extent that it is due to the damage to the plaintiff’s reputation and honour. While aggravated damages and injunctions are available remedies under Singapore law and Indonesian law, they are not warranted in this case under Singapore law.

[88] I turn next to the plaintiff’s claim in malicious falsehood. The plaintiff’s case is that the Indonesian Publications are a malicious falsehood. The plaintiff must thus prove that there was a malicious falsehood under Singapore law and that the acts complained of are also actionable under Indonesian law.

[89] The elements of the tort of malicious falsehood are as follows (see WBG Network (Singapore) Pte Ltd v Meridian Life International Pte Ltd and others [2008] SGHC 114):

(a) the defendant published to third parties words which are false;

(b) the words refer to the claimant or his property or his business;

(c) the words were published maliciously; and

(d) special damage has followed as a direct and natural result of their publication.

[90] In The Law of Torts in Singapore, the learned authors explain the meaning of “malice” in the following way (at 14.041):

[91] The element of “malice” is explained by Gatley at para 21.7 as follows:

[92] In this case, the plaintiff has not proven on the evidence that the claims in the Indonesian Publications are false, just as the defendant has not proven on the evidence that they are true (see above at [52]). I have also found, in respect of the plaintiff’s claim in defamation, that the defence of qualified privilege has been made out and not defeated by reason of malice (see above at [68]–[70]). Accordingly, the plaintiff’s claim in malicious falsehood has not been made out.

[93] Since I have found that the plaintiff’s claim in malicious falsehood has not been made out under Singapore law, it is not necessary to consider if the acts complained of are actionable under Indonesian law.

Counterclaims: breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty and money had and received

[94] As the defendant has acknowledged, all of his counterclaims turn on the existence of the Common Understanding. Since he has not, on the evidence before me, been able to prove the Common Understanding (see above at [52]), his counterclaims in breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty and money had and received have not be made out.

[95] In summary, the plaintiff’s claim in defamation cannot succeed because the defence of qualified privilege extends to the Indonesian Publications, Indonesian Republications and Singapore Republications. The plaintiff has not been able to prove the malice and falsehood required to establish a claim in malicious falsehood. The defendant, by not being able to prove the Common Understanding, is unable to establish his counterclaims in breach of contract, proprietary estoppel, constructive trust, breach of fiduciary duty and money had and received.

[96] I would place on record my appreciation to the Indonesian law experts, Dr Winarta, Dr Hasibuan and Professor Pramono for their patient and painstaking clarification and explanations of their opinions on Indonesian law.